Across the country, rural hospitals are closing at an alarming rate. Demography, socio-economic challenges and structural economic change threaten the long-run sustainability of rural health care institutions.
Since 2010, almost 100 rural hospitals across the U.S. have closed and some analysts predict many more hospitals nationally will close or merge with larger health care systems. Ironically, Republican-dominated states like Utah that resist Medicaid expansion have experienced the greatest number of closures. This raises a question: What’s different about Utah, where no rural hospitals have yet been forced to close?
The closure of rural hospitals has a significant impact on the communities they serve.
First, closures force rural patients to travel longer distances to access care, and longer distances mean life-threatening implications in an emergency. The 2015 Kaiser Commission Report on Medicaid and the Uninsured, noted that distance and travel time cause people to delay or forgo care, particularly among elderly and low-income people. Second, hospitals in rural communities, are often the largest employer providing higher paying jobs and serving as an economic engine to the community. Third, unfortunately hospital closures generates an exit of health practitioners creating gaps in both primary and specialty care.
What are the challenges facing rural hospitals? First, decreases in rural populations, aggravated by the exit of young people seeking employment in urban centers with greater economic opportunity. Second, the reliance on volume to generate revenues — number of medical procedures performed and beds filled. Third, their inability to achieve scale economies enjoyed by larger urban hospitals exacerbated by a declining population base limiting their ability to spread fixed costs over a larger service population. Fourth, many rural communities face aging populations and pervasive poverty forcing hospitals to provide more charity care and write-offs. Age and poverty also leads to greater reliance on Medicare and Medicaid, putting more financial pressure on hospitals because those programs reimburse hospitals at below market rates.
The northern Wasatch Front is served by hospitals and clinics provided by Intermountain Healthcare, the University of Utah and for-profit systems MountainStar, and Steward. However, in rural Utah there would be a dearth of hospitals and health care services without the commitment of nonprofits such as Intermountain Healthcare and other local community-supported hospitals.
Where people live shouldn’t dictate the quality of their care. Intermountain operates nine hospitals and 23 medical clinics in rural communities, providing excellent care to patients, maintaining the high quality that comes from being part of a system and bringing care close to home.
Intermountain also provides remote access to more than 40 clinical services through its Connect Care Pro teleHealth initiatives. Developed to meet the needs of small, rural hospitals where access to specialists is often limited, Connect Care Pro uses audio/video technology to connect clinicians with one another, keep patients closer to home and out of the hospital when possible, and remove traditional barriers so patients can get the specialized care they need, wherever they are.
In addition to providing access to high-quality health care and employment to Utah’s rural communities, Intermountain makes significant contributions to charity care and community benefits. In 2018, Intermountain provided charity care to 23,620 rural patients in the amount of $17.6 million. As a system, Intermountain provided charity care in 2018 to 269,106 patients in the amount of $246 million. It also provided financial support for over 527,000 visits to community and school clinics, over 16,500 diagnostic vouchers, valued at $12.9 million for low-income patients, and $36 million toward education provided for medical residents and college-level clinical training. These are substantial community benefits spread across Utah’s urban and rural communities.
Utah is fortunate to have a highly innovative integrated health care system committed to extraordinary care at an affordable cost serving Utah’s urban and rural communities. In the movie, “It’s A Wonderful Life.” Clarence the angel showed George Bailey what his community would be like if he had never been born. What if The Church of Jesus Christ of Latter-day Saints, back in 1975, did not wisely divest its interests in Utah hospitals as a gift to the Utah community? Creating Intermountain Healthcare, and stipulating that it become a model health care system, is a legacy gift to the state of Utah.
James “Cid” Seidelman
James “Cid” Seidelman is distinguished service professor of economics and former provost at Westminster College and chair of the Salt Lake Hospitals Board for Intermountain Healthcare.